Companies must be audited once a year for every year they aren't exempt, but there are plenty of reasons why even exempt companies should seek an Audit.
Whether a private limited company in the UK requires a statutory Audit by law depends on its size and financial activity. This is commonly known as the Audit threshold, which draws a clear line separating companies that must have an audit from those that may not need one.
An Audit must be conducted annually if any two of the following criteria are met during that year:
There are, however, several company types which require an annual statutory Audit regardless of their turnover, assets, or employee count. These also include company types listed in the table below:
|Any public company (excluding dormant public companies)||A subsidiary||An authorised insurance company|
|Any company regulated by UCTIS||Any corporate body whose shares have been traded within a regulated market||Any company working in the insurance market|
|Companies that issue e-money||Companies that deal with pensions or labour relations||Companies involved in banking|
|Companies whose name appears in the “special register” under the Industrial Relations Act 1971||Any company that funds a master trust pensions scheme||Any investment firm regulated by MiFID|
Some companies may have an Audit, whether voluntarily or through a legal requirement, when they fall below the audit threshold, such as UK subsidiaries of larger multi-national groups. This is why it is essential to seek guidance from a qualified auditor if you are unsure about your obligations.
If your company has not yet been audited, we strongly recommend seeking guidance from the Shorts Audit team. Even if your company does not require an Audit legally, it may still be highly beneficial.
The Audit process can benefit your business in several ways, such as enhancing your credibility, improving your fiscal management, detecting errors and potential fraud, ensuring you comply with best practices, and improving your access to financing and investment.
Our team can offer you valuable guidance and strategic advice, along with assurance and assistance that you are complying with all regulatory requirements. If you require any support in this area, we encourage you to reach out to our team today.